Fundamental analysis: Alamo Group Inc. (ALG)

Awarener score: 7.8

Conclusion

The higher the Awarener score, the more bang you get for the buck. It measures how much genuine funds the company generates for the stock price paid (Very good), the business stability (Excellent) and growth (Average), and the company's inclination to return cash to the stockholders (Superb).

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 7.5

Business has been growing at a low pace. It's been more than average in relation to peer companies.
Alamo Group Inc. business trend stability is excellent. The higher the stability, the lower the risk. It looks top-notch against rivals.

Margins score: 6.0

ALG profit margins -on goods and services sold- are usually very poor. They stand somewhat better than rival companies.
Business profit on sales tends to be good. It's more than average in relation to competitors.
Profits on sales made -available to repay debt and purchase properties- are usually sufficient. They remain in good shape compared to peers.
Earnings -before income taxes and interests on loans taken- tend to be sufficient in relation to total revenues. They're still well ranked against similar companies.
Profits -before income taxes- are usually good considering total sales, and remain more than average in relation to rivals.
Total net profit tends to be good when confronted to sales. Company stands more than average in relation to comparable firms.

Growth score: 5.1

Alamo Group Inc. profit -on goods and services sold- has been growing at a low pace. It's been close to average when compared to competitors.
In recent years, earnings -on operations- have been growing at a very low step, which has been somewhat worse than comparable firms.
Profits -available to repay debt and purchase properties- have been growing at a low pace, which compares almost average when measured against peer enterprises.
Earnings -before income taxes and interests on loans taken- have been growing at a slow tempo. It turns to be lacking compared to similar stocks.
In past years, profits -before income taxes- grew at a low speed. It was somewhat worse than rivals.
In the previous years, growth on total net profit has been low, and almost average when measured against peer companies.
Earnings per share have grown at a good rhythm in past years. It's been close to average when compared to industry peers.

Miscellaneous score: 4.0

ALG had to pay substantial income taxes in relation to profits made in the past years. It's been somewhat worse than peers.
The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 8.5

Alamo Group Inc. usually gets excellent returns on the resources it controls. It proves top tier when measured against peer firms.
The company normally gets very good proceeds -on the resources directly invested in the business-. They remain a slight improvement compared to similar companies.
There's usually abundant profitability -in relation to owned resources-. It ranks encouraging in relation to competitors.
In the past, got excellent returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's top tier when measured against comparable enterprises.

Usage of Funds score: 7.2

ALG usually uses a portion of genuine funds generated to buy or replace property, plant, or equipment. The need for reinvestments is rather normal. It stands top tier when measured against rival firms.
The company is usually replacing most of the property, plant, and equipment that gets old, and saving a little funds for something else, which is weak when measured against industry peers.
In the past twelve months it paid very little dividends, considering the current stock price. It came worse than most competitors.
Has significantly increased dividend payments in the past years. Business prospects probably have improved. The company has behaved rather normal in relation to similar firms.
Dividend payments usually represent a slight portion of genuine funds generation and are most likely safe. Sustainability looks top-notch against comparable companies.
The company usually reduces the pool of investors, resulting in fewer mouths feeding on the pie of profits. It remains excellent in relation to peer enterprises.
Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands impressive in relation to rivals.
The company uses a slight portion of genuine fund generation to reward investors. The company is usually improving its financial position, and could most likely increase stockholder rewards if it wished to do so. It still looks top tier when measured against competitors.

Balance Sheet score: 5.3

Alamo Group Inc. intangible assets (like brands and goodwill) represent some portion of resources controlled, according to accounting books. There could be some difficulties in liquidating them if the company ever gets in financial distress. It happens to be below average when measured against peer companies.
The company has a lot more short-term resources than short-term obligations. Liquidity concerns are most likely irrelevant. It turns to be excellent in relation to similar firms.
Roughly a quarter of resources controlled were provided for with financial debt. Creditors have some claims on the company. It remains slightly worse than rival firms.
Controlled resources can be made into cash within reason, which is quite good for liquidity. It looks weak when measured against rivals.
For every dollar of short-term obligations, the company has more than enough dollars in cash and short-term receivables. It's excellent in relation to peer firms.
For every dollar of short-term obligations, the company has almost another of cash and equivalents, which is slightly better than similar enterprises.
Usually, sales are on somewhat less than three months credit. It still ranks weak when measured against peers.
Normally has approximately four months of sales worth in inventory. It comes up as close to average when compared to competitors.
On average, it takes higher than six months from the purchase to charging customers. It happens to be somewhat worse than peers.
On average pays suppliers after a month and a half from the purchase. It ranks weak when measured against industry peers.
The company pays its suppliers six months or more before charging its customers, so there's abundant money invested in working capital. It's lacking compared to similar companies.
Net interest expenses consume a slight portion of usual business earnings, and are very easily bearable. It stands better than most rival firms.
Business earnings have usually been good when measured against loans taken. Cutting back reinvesting in the business, it could take less than three years to repay the obligations with current profitability. It ranks encouraging in relation to comparable enterprises.
Revenues are very good in relation to property, plant, and equipment required to operate. This metric is likely dependent on the industry the company operates in. Low property, plant, and equipment requirements allows the company to keep more money to reward stockholders in the long run. It looks in good shape compared to similar firms.
Resource exploitation is excellent when yearly sales are considered. This metric is normally tied to the industry where the firm belongs. It's still slightly worse than peer companies.

Valuation score: 6.4

Alamo Group Inc. looks somewhat expensive in relation to profits and financial position. It happens to be similar to competitors.
Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains lacking compared to peers.
In the past twelve months, the company generated some slightly better free funds in relation to the stock price, which stands slightly worse than similar companies.
The company usually generates more than enough genuine funds to cover up for its business needs. Surplus cash may be used to repay loans, to eventually buy new businesses, or to reward investors. Considering the financial position and stock price, at the current price the share might be interesting. It's still encouraging in relation to industry firms.
In the past twelve months, the company has significantly rewarded investors, considering both dividends and share on the pie of earnings. It came up impressive in relation to peer ventures.
The company has barely more debt than cash. It may borrow extra money if it wishes so, or start cumulating cash for future uses. It looks slightly better than similar enterprises.
Considering the past twelve months, traditional Price-to-Earnings relation is somewhat high. Improvement expectations are already in the stock price, which presents some risks. It ranks almost average when measured against peer companies.
Comparing the current stock price with the past twelve-months revenues gives a roughly two to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a weak position compared to rival firms.
The relation between the stock price and accounting book value is high, which may be good or bad depending on context. Run again in analytic mode if you want to dig deeper. The company remains somewhat worse than peer firms.
In the past twelve months, the operating business earned some money when compared to the current stock price and financial position. It happens to be below average when measured against industry peers.
In an alternate metric of bang for the buck, the company has usually shown a good earnings power ability when measured against the current stock price and financial position. It's still rather normal in relation to peer companies.

Total score: 6.3

Company at a glance: Alamo Group Inc. (ALG)

Sector, industry: Industrials, Farm & Heavy Construction Machinery

Market Cap: 2.14 billions

Revenues TTM: 1.56 billions

Alamo Group Inc. designs, manufactures, distributes, and services vegetation management and infrastructure maintenance equipment for governmental, industrial, and agricultural uses worldwide. Its Vegetation Management Division segment offers hydraulically-powered and tractor-mounted mowers, other cutters and replacement parts for heavy-duty and intensive uses and heavy duty applications, tractor- and truck-mounted mowing and vegetation maintenance equipment, and replacement parts. This segment also provides rotary and finishing mowers, flail and disc mowers, front-end loaders, backhoes, rotary tillers, posthole diggers, scraper blades and replacement parts, zero turn radius mowers, cutting parts, plain and hard-faced replacement tillage tools, disc blades, and fertilizer application components; aftermarket agricultural parts, heavy-duty mechanical rotary mowers, snow blowers, rock removal equipment, replacement parts, tractor attachments, agricultural implements, hydraulic and boom-mounted hedge and grass cutters, tractor attachments and implements, hedgerow cutters, industrial grass mowers, agricultural seedbed preparation cultivators, self-propelled sprayers and multi-drive load-carrying vehicles, cutting blades, and hydraulic and mechanical boom mowers. The company's Industrial Equipment Division segment offers truck-mounted air vacuum, mechanical broom, and regenerative air sweepers, pothole patchers, leaf collection equipment and replacement brooms, parking lot and street sweepers, excavators, catch basin cleaners, and roadway debris vacuum systems, as well as truck-mounted vacuum machines, combination sewer cleaners, and hydro excavators. This segment also offers ice control products, snowplows and heavy duty snow removal equipment, hitches, attachments, and graders; and public works and runway maintenance products, parts, and services, and high pressure cleaning systems and trenchers. The company was founded in 1955 and is headquartered in Seguin, Texas.